OREANDA-NEWS. September 28, 2016. JPMorgan Global Growth & Income (JPGI), previously JPMorgan Overseas IT, uses a disciplined and research-intensive approach to identifying 50-90 'best ideas' from around the world, with the aim of achieving capital appreciation in excess of the MSCI AC World index. It has recently adopted a new distribution policy whereby at the start of each year it will announce a dividend equivalent to at least 4% of NAV, to be paid in quarterly instalments. The board and management see this level of distribution - which may come from capital or income returns - as sustainable, and the predictability of the income stream as well as the higher yield should increase the attraction of the trust from investors who seek income as well as growth, potentially leading to a narrowing in the discount.
JPGI's discount to cum-income net asset value stood at 9.4% at 23 September, in line with or wider than the averages over one, three, five and 10 years, but well below the five-year high of 15.5% seen at the start of July following the result of the UK's EU referendum. Peers in the AIC Global Equity Income sector tend to trade closer to par, and it is reasonable to assume that once the effects of JPGI's new, higher distribution policy begin to be felt, demand from income-seeking investors could drive a rerating to a level closer to that of the peer-group average. The board has set a maximum discount target of 5%.
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